Commission vs Booth Rental :: The Pros and Cons of Each

Hairstylists and other beauty professionals are often faced with two options when they start their career: renting a booth or chair from a salon owner, or working for an employer on a salary or commission-based structure.  Both options offer good career paths for seasoned pros as well as those just starting out in the industry, but making your choice will largely depend on your individual circumstances.

When I first enrolled in cosmetology school, booth rental wasn’t even an option here in Columbus and Central Ohio.  This changed fifteen years ago when a Columbus-based commercial real-estate developer purchased a traditional commission based beauty salon and converted this into the first local “nonemployer” booth rental salon employing independent contractors as stylists.

Renting a Booth in a Salon?

A salon that offers booth rental is similar in nature to a landlord tenant relationship.  While someone owns the building, they rent out space to individual tenants.  As the stylist, you will rent a booth or a chair from the salon, and pay rent on that space.  It’s no different that renting an office in an office building or an apartment in an apartment building. The landlord has zero vested interest in your personal success and growth, and their concern is that the rent is paid.

Stylists in this type of situation must pay a monthly rental fee to the salon owner in exchange for salon space—usually a vanity, mirror, and hydraulic salon chair—and the use of utilities. The salon will also likely allow you to use hood dryers, shampoo bowls, towels, and in some cases a reception area.  Otherwise, you are in charge of supplying everything else needed to run your business.  This includes all your tools, supplies, and styling products.

There are several pros for this type of employment.  You can set your own hours and rates, making it easier to fit work into an active and busy lifestyle. You are also your own boss and set the rules for your business.

There are also drawbacks to booth rental salons.  When working in a booth rental situation, you are little more than a tenant renting from a landlord who in most instances has little to no experience actually running and operating a salon or spa, building and servicing a clientele, and has zero ability to mentor you in your trade helping you to advance and broaden your skill set.  While you may have gotten into the business to indulge your passion for hair, skin, makeup or nails, booth rental requires you also devote a great deal of your time and effort to activities such as: marketing, accounting, sales, inventory management, networking and those tasks associated with owning and operating an independent business.  You will also be required to cover the costs associated with all of this including your initial inventory purchases, as well as the forming of the separate legal entity your business will take to protect your personal assets in the event you are sued (that’s right as a booth rental stylist you are the business and you, not your salon landlord bear this liability) and to minimize your tax liability.  Furthermore, many of the top professional product lines are generally unavailable to booth rental professionals, and even those that are often require initial product orders of $3,000-$10,000 which effectively put them out of reach.

The Pros
• You are your own boss.  No one dictates your schedule or tells you how much to charge your clients. Your schedule accommodates you – not a salon owner/manager.
• You are independent and can run your business as you see fit.
• After paying your salon rental fee, all the money you earn is yours.

The Cons
• You are a tenant, the owner has zero vested interest in your personal success and growth.
• Your owner is a landlord likely with little to no experience in your industry and their ability to mentor you in your craft is limited at best.
• You must pay your own benefits with no group discount (health insurance, disability insurance, life insurance, etc.).
• You must purchase all of the tools, implements, initial inventory and products you use.
• Many of the top professional product lines are unavailable to those who work in a booth rental salon.
• You must market and network yourself to earn new business.
• Continuing education will largely be your responsibility as your landlord has no incentive to further your skill sets and product knowledge.
• You must hold a state sales tax license and collect sales tax on your services and retail sales.
• You must keep your own accounting and clientele records and ensure you keep accurate business records of all income and expenses.
• You must track and pay your own state and federal taxes.
• You bear the liability associated with the business and the cost associated with forming the appropriate legal entity and costs associated with defending yourself if you are sued.
• You run your business from start to finish, leaving your clients less catered to especially when they are waiting without support staff or a true reception area.
• Inferior working environment and equipment as landlords are less concerned with providing your clients a memorable and quality experience, and more concerned with limiting their expenses.
• In most instances an inability to provide your clients a one-stop-shop as the quality of professional and their segmented schedules tend to prohibit this.

The Verdict

The experienced cosmetologist with a strong clientele base and a business acumen has the best chance of success in a booth rental scenario.  It’s a lot easier to set up and run your own business if you have a list of clients who will keep you afloat.

You may also be an ideal independent stylist if you have a strong work ethic, a great deal of self-discipline, and the ability to handle the related administrative and marketing tasks. Independent contractors must be able to juggle their stylist duties, along with all of the necessary tasks involved with running a business.

Many cosmetologists use this type of setting as a precursor to opening and operating their own salon.  It provides them with a glimpse into what to expect as a salon owner, thus preparing them to make the move to salon ownership.

Working on Commission?

A commission-based stylist job is more of a career path than anything else.  Under this structure you’ll work for a salon.  You will be scheduled to work the way you would in any other career, on certain days and certain times though there are varying levels of flexibility in this model.  You will be paid hourly, a set salary, or commissions in this setting.

As a commissioned employee, you can expect to keep a percentage of the income you bring into the salon through the services you perform.  You can expect most salons to offer you a graduated commission as a percentage of the total revenue you generate for the business.  Your employer may also offer you a percentage of the total retail products you sell – usually about 10 to 15 percent – once you hit a specific sales threshold.

The pros of this setup are simple to see.  Not only will you avoid dealing with marketing, product purchasing for retail sales, growing a clientele by yourself and other pitfalls of running your own business, but you’ll have the help and knowledge of the entire salon of experienced professionals behind you.  Many salons also provide advanced education and training through instructors they bring into the salon, as well as educators associated with the product lines the salon offers.  In this structure, the salon owner has an inherent interest in their professionals success, and an incentive to invest in their team members to advance their skills, education and the overall quality of their work thereby allowing them to increase the professionals prices.

That said, the single most significant advantage commission-based salons/spas have over booth/chair rental and suites is the ability to offer the highest level of orchestrated customer service.  By “orchestrated,” we are referring to team based, coordinated, vision-driven customer service being led with purpose and passion.  This includes a team-based culture which functions at the highest level to deliver coordinated excellence and achieve a common goal.

The cons of this model are few and far between, but they do exist.  If you’re looking to be your own boss, make your own hours, and charge the prices you wish to charge, a commission-based salon may not be the best fit for you however, as mentioned there are varying levels of flexibility in this model and from salon to salon.

The Pros
• You don’t have to worry about running a business – you can focus solely on your craft.
• You have the dedicated support and knowledge of a salon behind you as you grow your clientele base.
• Limited to no startup costs.
• The salon handles the marketing of the business, so you don’t have to deal with the constant pressure of bringing in new clients.
• As you advances your skills and knowledge, and gain a larger client base, you can graduate to a better commission structure with the salon.
• Superior grade professional products.
• Generally a higher-end facility offering state of the art equipment and tools and catering to a more sophisticated clientele willing to pay a premium for the superior environment, quality of service, and level of customer service.
• Significantly more opportunities for advanced education and training with top industry professionals.
• You may enjoy a number of employee benefits, such as vacation time, health insurance, and sick pay.

The Cons
• You must charge the prices set by the salon for your services.
• Your schedule and hours are dictated by the salon owner/manager (flexibility varies here from salon to salon).
• You must use the retail products the salon sells.

The Verdict

A commission-based structure is undoubtedly the best for beginner stylists who benefit from a steady influx of new clients.  The collaborative, team environment is helpful for many stylists, as it provides them with the support needed to mature as a stylist.

While both of these options give you the opportunity to attract new clients while providing you with access to professional facilities, a commission-based salon or spa is generally going to offer a more luxurious setting with a superior ambiance and be suited to a higher-end clientele. Commission-Based salon’s and spa also tend to be full service facilities offering everything under one roof including: hair services, skin services, makeup services, nail services, massage services, and more. This also makes them a more popular option with a high-end clientele while also allowing them to offer bridal services,

Figuring out whether commission-based salons or a booth-rental salon is the right choice for your career will largely depend on your circumstances including your financial status, skill sets, lifestyle and career goals.  Many find the benefits and support of a commission-based salon to be the best fit for their budding careers, but everyone is different.

Your success as a hairstylist, cosmetologist, makeup or nail artist depends a lot on your ability to learn and practice your craft in a supportive environment you love, where you feel good about yourself, and where you get recognized for your uniqueness and talents.  That’s kind of what working in a salon is all about, right?

You’re giving a little bit of yourself to each client you see. You owe it to yourself to set up your business in a way that works for you.

At PLEIJ Salon+Spa we believe that our people are our greatest asset and we seek to distinguish our venture through their creative artistry and professionalism, as well as their courtesy and warmth.  We seek to employ those who are driven and committed to the absolute mastery of their trade, possessing the ability to energize and inspire others.  Professionals who are passionate about what they do, and seek to foster a positive and memorable experience with every guest they serve.  Quality starts with our people, and should be visible in every aspect of our company.

Our Commitments
• We work with, and on the behalf of our professionals to generate and expand their client base, helping them to make connections and strengthen the relationships with those they serve.
• We aren’t simply curators of talent but rather are commitment to the cultivation of new talent, as well as the furthering and ongoing development of existing talent.
• We are firmly committed to both the continued growth and success of our staff, fully realizing that the two are intimately connected.
• We also believe that how a professional feels about their career and the company they work for significantly impacts the experience they deliver. We are committed to being a company our professionals are enthusiastic about, and one they are excited to work for.
• We are committed to helping our staff be and feel their best, offering encouragement and demonstrating our appreciation of them. Our professionals should be our staunchest supporters because of their infectious enthusiasm for the company they work for, and the team they are a part of. That creates more momentum for us when it comes to client retention and attraction, as well as new professionals who share our values and can further aid us in advancing our brand.

We believe that at the heart of every great beauty experience lies the relationship between professional and client.  We’ve created a place that fosters this relationship, and one in which it, and YOU can flourish.

Start Your Journey Today

Discover all of the amazing career opportunities at PLEIJ Salon+Spa.  Whether you’re interested in exploring a new career as a salon or spa professional, an experienced professional looking for a change and the opportunity to advance your career, or looking for full or part-time employment, we offer exciting opportunities throughout our organization.  We also offer internship opportunities for students seeking valuable industry experience.

Apply now and stay connected with future opportunities by submitting an application or view our current job openings. We’re also available by email at info@pleijsalon.com. We look forward to hearing from you!

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